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How Coupons Discount Your Brand

January 11, 2011  

"The recession has caused lots of companies to panic," writes Laura Ries at Ries' Pieces. "And when companies panic, they print coupons and throw up sale signs. Look in your mailbox, your email inbox or your newspaper and you will see what I mean. Everybody is having a sale."

There's only one problem, she argues: Though deep discounting works in the short term, it causes long-term damage to your brand. This is why:

  • Customers are thrilled when they first receive coupons and offers for your products and services. Who doesn't want 10, 20 or even 50 percent off?
  • But discounts train customers to think your regular prices are too high, and to wait for the next coupon before they shop again. They might eventually refuse to make any purchase without a coupon.

For some companies, the culture of discounting has spiraled out of control. "Try checking out of one of these stores without using a coupon and even the sales clerk looks at you like [you're] a pathetic loser," she says. "Nobody pays full price here, what's the matter with you! She may even reach down to pull out a coupon of her own to give you."


Resisting the urge to offer coupons isn't easy—especially when everyone seems to be doing it. But protecting your brand now will provide better overall results in the long run.

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  • by J Fisher Tue Jan 11, 2011 via web


    Great article. I cannot agree more!
    That is why Groupon and such companies are not a good idea, and do not have unlimited growth!!

  • by Meri Tue Jan 11, 2011 via web

    Not a good article. I couldn't disagree more. Experience has taught that there are definite times to use coupons, such as introducing a new product or to serve as a loss leader. This author lumps all products, all types of coupons and all types of consumers together and makes a general statement that is not supported by concrete statistics or facts. Marketing Profs would serve its readers better by publishing authors who have supported opinions and provide better clarity when to use various marketing techniques.

  • by Ann Handley Tue Jan 11, 2011 via web

    Thanks for the comments here, J and Meri. I appreciate your very different points of view.

    @Meri: For the record, we published this piece based on Laura's blog post precisely because she challenges some assumptions, and because she articulates her perspective quite well. You might not agree with that perspective -- nor do you have to -- but nonetheless it's a view worth considering.

    What's more, Laura isn't exactly a slouch: She's written or co-written a bunch of books on branding in the past decade-plus -- including "The Fall of Advertising and the Rise of PR," which was both a Business Week and Wall Street Journal bestseller. In other words, she has some street cred that makes her ideas worth paying attention to.

    Anyway -- thanks for chiming in. And of course, you are always welcome to pen a counter-point to this. I'd love to hear your more specific thoughts, too. (Because we don't just publish authors of WSJ bestsellers!)

  • by Mickey Lonchar Tue Jan 11, 2011 via web

    Though not technically a "coupon," I appreciate how Nordstrom's handles discounts. The retailer is known for its "Half Yearly Sales" where the stores get away with very deep discounts on a range of items, but just for the given period. This definitely has not "cheapened the brand" a bit, if anything it makes the specials even more of an anticipated event because of the perceived value of the merchandise. Contrast that to Macy's and its "White Flower Days" which seem to happen every week. If there's a lesson here, it might be frequency and duration. Making discounts look "limited" has the possibility of making them "special" and upping their value to customers.

    Great article. I look forward to your next.

  • by Ann Handley Tue Jan 11, 2011 via web

    Speaking of coupons... check out this "Extreme Couponing" video! Holy Toledo: http://www.ebaumsworld.com/video/watch/81256145/

  • by irene Ross Tue Jan 11, 2011 via web

    I must agree with Laura Ries, how many people read their 'junk' mail. But then there are 'coupons' dressed up as loyalty discount cards that help grow businesses. Gloria Jeans is one example. So in short, some 'discount vouchers' help build relationships whilst others help fill the bin.

  • by Jill Solomon Wed Jan 12, 2011 via web

    A strategic couponing campaign can actually be very beneficial for businesses. The key is to implement a campaign that does not over discount your brand but rather focuses on moving hard to sell inventory or encourages customers to make a larger purchase in order to receive an incentive like free shipping. By developing a targeted and strategic campaign, couponing can help increase your customer base, sell more product and generate more sales for your business.

  • by Tara Wed Jan 12, 2011 via web

    Great article. The situation is the same here is Australia. Australian retailers are definitely conditioning customers to expect everything to always be on sale. One sale seems to run into another. People now refuse to pay full price. It's a vicious cycle – and as with most (not all) price based marketing strategies the retailer loses out.

  • by John Counsel Tue Feb 14, 2012 via web

    Why is no-one talking about value-added coupon strategies?

    When you're the SELLER, the only thing dumber than allowing price to be the deciding factor in a purchase is MAKING it the deciding factor!

    In conflict resolution there's an old saying: "He who throws the first punch is the first to admit that he's run out of ideas".

    The equivalent in marketing and selling: "He who is first to cut prices is the first to admit — publicly! — that he's an incompetent ignoramus!"

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